Starkville schools ask for $3M federal loan

June 24, 2009

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STARKVILLE -- It took less than three minutes for the Starkville school board to pass a resolution that may save them almost $1 million on an interest-free $3 million loan.

The board met in a special called session Tuesday afternoon to handle just one item of business. The meeting was called Monday evening after Superintendent Judy Couey received word after 5 p.m. that day of the availability of federal stimulus package money.

"The State Board of Education chose to allot the calendar year 2009 allocation of $132 million on a first-come-first-serve basis," the letter from the state Department of Education states.

Acting quickly, the board unanimously passed a resolution stating their intent to issue interest-free qualified school construction bonds of $3 million, the maximum allowed for them to request. Bill Weeks made the motion, which was seconded by Keith Coble. Board member Pickett Wilson was absent.

The $3 million the board applied for is part of what would have been the third phase of the $26.5 million bond issue voters approved in 2007. If the full $3 million is approved, the board soon will issue the remaining $8.6 million in a final, interest-bearing loan.

Comptroller Rob Logan was instructed to apply for the 15-year loan immediately after the meeting. The current interest rate is about 3.9 percent for a 15-year loan, so the district would save about $960,000 if it receives this interest-free loan.

The loan is not guaranteed to be given to the district, and Walter Taylor asked for Logan''s estimate of the district''s chances of receiving the loan.